U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10K-SB
(Mark One)
[ X ] Annual report pursuant to section 13 or 15(d) of the Securities Exchange
Act of 1934 for the fiscal year ended December 31, 1999.
[ ] Transition report under section 13 or 15(d) of the Securities
Exchange Act of 1934 for the transition period from _______________ to
_______________.
Commission file number 0-25901
CONCEPT CAPITAL CORP.
(Name of small business issuer in its charter)
Utah 87-0422564
(State or other jurisdiction (IRS Employer Identification No.)
of incorporation or organization)
175 South Main Street, Suite 1210, Salt Lake City, Utah 84111
(Address of principal executive offices) (Zip Code)
Issuer's telephone number (801)-364-2538
Securities to be registered under Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
None None
Securities to be registered under Section 12(g) of the Act:
Common Stock, Par Value $0.001
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days.
Yes [ X ] No [ ]
Check if there is no disclosure of delinquent filers in response to Item 405
of Regulation S-B contained in this form, and no disclosure will be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. [___]
The issuer's revenues for the fiscal year ended December 31, 1999, were
$21,915.
State the aggregate market value of the voting and non-voting common equity
held by non-affiliates computed by reference to the price at which the common
equity was sold, or the average bid and asked price of such common equity, as
of a specified date within the past 60 days (See definition of affiliate in
Rule 12b-22 of the Exchange Act). As of March 20, 2000, based on the bid
quotation of $0.3125 appearing on the OTC Bulletin Board interdealer quotation
system on that date, the aggregate market value of the 2,725,000 shares held
by non-affiliates was $851,563.
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(Issuers involved in bankruptcy proceedings during the past five years) Check
whether the issuer has filed all documents and reports required to be filed by
Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court. Yes ____ No ____
(Applicable only to corporate registrants) State the number of shares
outstanding of each of the issuer's classes of common equity, as of the latest
practicable date. As of March 20, 2000, there were outstanding 4,375,000
Shares of the Issuer's Common Stock, par value $0.001.
Documents Incorporated by reference. If the following documents are
incorporated by reference, briefly describe them and identify the part of the
Form 10-KSB (e.g., Part I, Part II, etc.) into which the document is
incorporated: (1) any annual report to security holders; (2) any proxy or
information statement; (3) any prospectus filed pursuant to Rule 424(b) or (c)
under the Securities Act of 1933 ("Securities Act"). The list of documents
should be clearly described for identification purposes (e.g., annual report
to security holders for fiscal year ended December 24, 1990). None.
Transitional Small Business Disclosure
Format (check one):
Yes ____ No X
FORWARD-LOOKING STATEMENTS
This report contains forward-looking statements as defined in the Private
Securities Litigation Reform Act of 1995. These statements reflect the
Company's views with respect to future events based upon information available
to it at this time. These forward-looking statements are subject to certain
uncertainties and other factors that could cause actual results to differ
materially from these statements. These uncertainties and other factors
include, but are not limited to: the ability of the Company to locate a
business opportunity for acquisition or participation by the Company; the
terms of the Company's acquisition of or participation in a business
opportunity; and the operating and financial performance of any business
opportunity following its acquisition or participation by the Company. The
words "anticipates," "believes," "estimates," "expects," "plans," "projects,"
"targets" and similar expressions identify forward-looking statements.
Readers are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date the statement was made. The
Company undertakes no obligation to publicly update or revise any forward-
looking statements, whether as a result of new information, changes in
assumptions, future events or otherwise.
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Part I
Item 1. Description of Business
History
Concept Capital Corporation (the "Registrant" or the "Company") was
organized under the laws of the State of Utah on May 21, 1985 for the purpose
of seeking business opportunities for acquisition or participation by the
Company. In connection with its organization, the Company sold 300,000 shares
of its restricted common stock to its original officers and directors and
their associates for $0.04 per share, or an aggregate of $12,000. During
1986, the Company completed a public offering of 1,450,000 shares of common
stock at an offering price of $0.10 per share, from which the Company received
net proceeds of approximately $131,755 after deducting the costs of the
offering. The offering was conducted pursuant to the exemption from the
registration requirements of the Securities Act of 1933, as amended, provided
by Regulation A and was registered by qualification in the State of Utah.
On February 10, 1999, the Company entered into a Stock Purchase Agreement
with T. Kent Rainey, the current president of the Company, pursuant to which
the Company agreed to sell Mr. Rainey and other investors 2,625,000
unregistered shares of the Company's common stock for $105,000, subject to
approval by the Company's shareholders. The transaction was approved by the
Company's shareholders on February 23, 1999 and the shares were issued on
March 2, 1999.
Since its organization in 1985, the Company has not engaged in active
business operations and its activities have consisted of its search for and
evaluation of potential business opportunities for acquisition or
participation by the Company. During this period, the Company has incurred
limited operating expenses necessary to maintain its status as a corporation
in good standing and has incurred expenses in connection with its search for
and evaluation of potential business opportunities. The Company has evaluated
several business opportunities since the date of its organization but has not
acquired any business opportunity. Due to the lack of active operations and
the Company's stated purpose of seeking to acquire a currently unknown
business opportunity, the Company may be classified as a "blank check" company
subject to all the risks of a new business together with the substantial risks
associated with the search for and acquisition of business opportunities.
Business Plan
The Company intends to continue to seek, investigate, and, if warranted,
acquire an interest in a business opportunity. Management has not established
any firm criteria with respect to the type of business with which the Company
desires to become involved and will consider participating in a business
enterprise in a variety of different industries or areas with no limitation as
to the geographical location of the enterprise. The Company's management will
have unrestricted discretion in reviewing, analyzing, and ultimately selecting
a business enterprise for acquisition or participation by the Company. It is
anticipated that any enterprise ultimately selected will be selected by
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management based on its analysis and evaluation of the business and financial
condition of the enterprise, as well as its business plan, potential for
growth, and other factors, none of which can be anticipated to be controlling.
If the Company is able to locate a suitable business enterprise, the decision
to acquire or participate in the enterprise may be made by the Company's board
of directors without shareholder approval. Approval may also be obtained
pursuant to a consent of majority shareholders and, since members of
management and the principal shareholders of the Company own over 50% of the
Company's outstanding shares, they would be able to approve any transaction
without the affirmative vote of any other shareholders. Further, it is
anticipated that the acquisition of or participation in an enterprise may
involve the issuance by the Company of a controlling interest in the Company
which would dilute the respective equity interests of the Company's
shareholders and may also result in a reduction of the Company's net tangible
asset value per share. In connection with an acquisition, members of
management may also be able to negotiate the sale of their shares in the
Company at a premium.
The activities of the Company will continue to be subject to several
significant risks which arise primarily as a result of the fact that the
Company has no specific business and may acquire or participate in a business
opportunity based on the decision of management which will, in all
probability, act without the consent, vote, or approval of the Company's
shareholders. The risks faced by the Company are further increased as a
result of its limited resources and its inability to provide a prospective
business opportunity with a significant amount of capital. (See "Item 1.
Description of Business: Risk Factors.")
Although management believes that it is in the best interest of the
Company to acquire or participate in a business enterprise, there is no
assurance that the Company will be able to locate a business enterprise which
management believes is suitable for acquisition or participation by the
Company or that if an enterprise is located, it can be acquired on terms
acceptable to the Company. Similarly, there can be no assurance that if any
business opportunity is acquired, it will perform in accordance with
management's expectations or result in any profit to the Company or
appreciation in the market price for the Company's shares.
If business opportunities become available, the selection of an
opportunity in which to participate will be complex and extremely risky and
may be made on management's analysis of the quality of the other company's
management and personnel, the anticipated acceptability of new products or
marketing concepts, the merit of technological changes, and numerous other
factors which are difficult, if not impossible to analyze through the
application of any objective criteria. There is no assurance that the Company
will be able to identify and acquire any business opportunity which will
ultimately prove to be beneficial to the Company and its shareholders.
It is anticipated that business opportunities may be introduced to the
Company from a variety of sources, including its officers and directors, and
their business and social contacts, professional advisors such as attorneys
and accountants, securities broker-dealers, venture capitalists, members of
the franchise community, and others who may present unsolicited proposals.
The Company will not restrict its search to any particular business,
industry, or geographical location. The Company may enter into a business or
opportunity involving a "start-up" or new company, an established business
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which needs additional funding, or a firm which is in need of additional
capital to overcome financial problems or difficulties. It is impossible to
predict the status of any business in which the Company may become engaged.
The period within which the Company may participate in a business
opportunity cannot be predicted and will depend on circumstances beyond the
Company's control, including the availability of business opportunities, the
time required for the Company to complete its investigation and analysis of
prospective business opportunities, the time required to prepare the
appropriate documents and agreements providing for the Company's
participation, and other circumstances.
In certain circumstances, the Company may agree to pay a finder's fee or
to otherwise pay for investment banking or other services provided by persons
who are unaffiliated with the Company but who submit business opportunities in
which the Company participates. No finder's fees or other compensation will
be paid to any person who is an officer, director, or current owner 10% or
more of the Company's issued and outstanding Common Stock.
It is impossible to predict the manner in which the Company may
participate in a business opportunity. Specific business opportunities will
be reviewed and, on the basis of that review, the legal structure or method
deemed by management to be most suitable will be selected. The structure may
include, but is not limited to, mergers, reorganizations, leases, purchase and
sale agreements, licenses, joint ventures, and other contractual arrangements.
The Company may act directly or indirectly through an interest in a
partnership, corporation, or other form of organization. Implementing the
structure may require the merger, consolidation, or reorganization of the
Company with other corporations or forms of business organization, and there
is no assurance that the Company would be the surviving entity. In addition,
the current shareholders of the Company may not have control of a majority of
the voting shares of the Company following a reorganization transaction. As
part of the transaction, all or a majority of the Company's directors may
resign and new directors may be appointed without any vote by shareholders.
The Company will most likely acquire a business opportunity by issuing
shares of the Company's common stock to the owners of the business
opportunity. Although the terms of the transaction cannot be predicted, in
many instances the business opportunity entity will require that the
transaction by which the Company acquires its participation be "tax-free"
under Sections 351 or 368 of the Internal Revenue Code of 1986 (the "Code").
In an exchange of property for Common Stock under Section 351 of the Code, the
tax free status of the transaction depends on the issuance of shares of the
Company's Common Stock to transferors of the business opportunity in an amount
equal to at least 80% of the Common Stock of the Company outstanding
immediately following the transaction. In a transaction of this type, the
current shareholders would retain 20% or less of the total issued and outstand
ing shares of the Company. Section 368 of the Code provides for tax free
treatment of certain business reorganizations between corporate entities where
one corporation is merged with, or acquires the securities or assets of,
another corporation. Generally, the Company will be the acquiring corporation
in a Section 368 business reorganization, and the tax free status of the
transaction will not depend on the issuance of any specific amount of the
Company's Common Stock. It is not uncommon however, that as a negotiated
element of a Section 368 transaction involving a blank check company, the
acquiring corporation issue securities in such an amount that the shareholders
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of the acquired corporation will hold 50% or more of the acquiring
corporation's securities immediately after the transaction. Therefore, there
is a substantial possibility that in a Section 368 transaction involving the
Company, current shareholders may retain 50% or less of the total issued and
outstanding shares of the Company. A business opportunity acquisition
structured as a tax free reorganization under Sections 351 or 368 of the Code
may result in substantial additional dilution to the equity of those who were
shareholders of the Company prior to the acquisition.
Notwithstanding the fact that the Company is technically the acquiring
entity in the foregoing circumstances, generally accepted accounting
principles will ordinarily require that the transaction be accounted for as if
the Company had been acquired by the other entity owning the business venture
or opportunity and, therefore, will not permit a write up in the carrying
value of the assets of the other company.
It is anticipated that securities issued in a transaction of this type
would be issued in reliance on exemptions from registration under applicable
federal and state securities laws. In some circumstances, however, as a
negotiated element of the transaction, the Company may agree to register such
securities either at the time the transaction is consummated or under certain
conditions or at specified times thereafter. The issuance of a substantial
number of additional securities and their potential sale into any trading
market which may develop in the Company's Common Stock may have a depressive
affect on the market price for the Company's common stock.
The Company will participate in a business opportunity only after the
negotiation and execution of a written agreement. Although the terms of the
agreement cannot be predicted, generally the agreement would require specific
representations and warranties by all of the parties thereto, specify certain
events of default, detail the terms of closing and the conditions which must
be satisfied by each of the parties thereto prior to the closing, set forth
remedies on default, and include miscellaneous other terms.
It is emphasized that management of the Company has broad discretion in
determining the manner by which the Company will participate in a prospective
business opportunity and may enter into transactions having a potentially
adverse impact on the current shareholders in that their percentage ownership
in the Company may be reduced without any increase in the value of their
investment or that the business opportunity in which the Company acquires an
interest may ultimately prove to be unprofitable. The transaction may be
consummated without being submitted to the shareholders of the Company for
their consideration. In some instances, however, the proposed participation
in a business opportunity may be submitted to the shareholders for their
consideration, either voluntarily by the board of directors to seek the
shareholders' advice or consent or because of a requirement to do so by state
law.
The investigation of specific business opportunities and the negotiation,
drafting, and execution of relevant agreements, disclosure documents, and
other instruments may require substantial management time and attention and
substantial costs for accountants, attorneys, and others. If a decision is
made not to participate in a specific business opportunity, the costs
previously incurred in the related investigation would not be recoverable.
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Furthermore, even if an agreement is reached for the participation in a
specific business opportunity, the failure to consummate that transaction may
result in the loss to the Company of the related costs incurred.
The Company's operations following its acquisition of an interest in a
business opportunity will be dependent on the nature of the opportunity and
interest acquired. The specific risks of a given business opportunity cannot
be predicted at the present time.
The Company is not registered and does not propose to register as an
"investment company" under the Investment Company Act of 1940 (the "Investment
Act"). The Company intends to conduct its activities so as to avoid being
classified as an "investment company" under the Investment Act and, therefore
to avoid application of the registration and other provisions of the
Investment Company Act and the related regulations.
Regulation
It is impossible to predict what government regulation, if any, the
Company may be subject to until it has acquired an interest in a business
opportunity. The use of assets and/or conduct of businesses which the Company
may acquire could subject it to environmental, public health and safety, land
use, trade, or other governmental regulations and state or local taxation. In
selecting a business opportunity to acquire, management will endeavor to
ascertain, to the extent of the limited resources of the Company, the affects
of government regulation on the prospective business of the Company. In
certain circumstances, however, such as the acquisition of an interest in a
new or start-up business activity, it may not be possible to predict with any
degree of accuracy the impact of government regulation.
Competition
The Company encounters substantial competition in its efforts to locate a
business opportunity. The primary competition for desirable investments comes
from investment bankers, business development companies, venture capital
partnerships and corporations, venture capital affiliates of large industrial
and financial companies, small business investment companies, and wealthy
individuals. Most of these entities have significantly greater experience,
resources, and managerial capabilities than the Company and are in a better
position than the Company to obtain access to attractive business
opportunities.
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Facilities
The Company's offices are located at the office of its president at 175
South Main Street, Suite 1210, Salt Lake City, Utah 84111. The Company
sublets this space on a month-to-month basis for a monthly rental of $180,
plus reimbursement for its portion of office costs such as telephone, fax,
copies, postage etc. estimated at an additional $50 to $70 per month.
Employees
The Company has no employees and its business and affairs are handled by
its officers and directors who provide services to the Company on an as needed
basis. Management of the Company may engage consultants, attorneys, and
accountants on a limited basis, and does not anticipate a need to engage any
full-time employees so long as it is seeking and evaluating business
opportunities.
Year 2000
The Company did not anticipate that the so-called "Year 2000" problems
would have any material adverse impact on the Company, especially since the
Company conducts no active business operations and owns no properties or
equipment. As of March 20, 2000, no Year 2000 problems had occurred and the
Company had not experienced any adverse impact from Year 2000 related
problems.
Risk Factors
"Blank Check" Company
The business plan of the Company is to use its limited capital to search
for, investigate, and acquire or participate in a business opportunity which
has not yet been selected. A business opportunity will be selected by
management, and management may select an opportunity without approval of the
Company's shareholders. Accordingly, shareholders are unable to determine the
future activities of the Company and may have no opportunity to analyze the
merits of any opportunity to be acquired by the Company. In addition, the
Company has no employment contracts with members of management, no assurance
can be given that the Company will continue to be managed by these people in
the future, and it is likely that current management will resign at such time
as a business opportunity is acquired.
Limited Capital
As of December 31, 1999, the Company had assets in the form of cash and
cash equivalents in the amount of approximately $255,000 which is not adequate
to permit the Company to undertake an elaborate or extensive search for
business opportunities. This limited capital will prevent the
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Company from participating in any business opportunity which requires
immediate substantial additional capital and may make it difficult or
impossible for the Company to locate a business opportunity.
Future Issuance of Substantial Additional Shares
It is likely that the Company would acquire an interest in a business
opportunity through a reverse merger or other business reorganization
involving the issuance by the Company of additional shares of the Company's
Common Stock. It is also likely that the Company would issue a controlling
interest to the shareholders of the acquired company in which event the
ownership interest of current shareholders would be substantially diluted.
The board of directors, acting without shareholder approval, has authority to
issue all or any part of the authorized but unissued stock of the Company.
Thus, the board of directors could issue up to 45,625,000 additional shares of
Common Stock without shareholder approval. (See "Item 1. Business: Business
Plan.")
No Operating History
The Company was incorporated under the laws of the state of Utah in 1985,
and has had no operations or significant revenues from operations. The
Company faces all of the risks inherent in any new business, together with
those risks specifically inherent in the search for and acquisition of
business opportunities.
No Assurance of Profitability
There can be no assurance that the Company will be able to acquire or
enter into a business opportunity or, if the Company does acquire or enter
into a business opportunity, that the business opportunity will develop into a
successful or profitable business. (See "Item 1. Business: Business Plan.")
Limited Market for Common Stock
The market for the Company's common stock must be characterized as a
limited market due to the absence of any significant trading volume and the
small number of brokerage firms acting as market makers. The market for low
priced securities not traded on a national exchange or included in the NASDAQ
system is generally less liquid and more volatile than national exchange and
NASDAQ markets and rapid and extreme fluctuations in market prices are not
uncommon. No assurance can be given that the current over-the-counter market
for the Company's common stock will continue or that the prices in the market
will be maintained at their present levels. (See "Item 5. Market for Common
Equity and Related Stockholder Matters.")
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Control by Principal Shareholders
The officers, directors and principal shareholders of the Company own
approximately 56.2% of the Company's outstanding shares of common stock. As a
result, these shareholders will be able to control the management and policies
of the Company through their ability to determine the outcome of elections for
the Company's board of directors and other matters requiring the vote or
consent of shareholders.
Lack of Revenues and Dividends
The Company has had no revenues from principal operations, and it cannot
predict when, if ever, it will realize any material revenue or realize a
profit from any operations it may subsequently undertake. The Company has
paid no dividends and does not propose to pay them in the foreseeable future.
Possible Sale of Common Stock Pursuant to Rule 144
As of March 20, 2000, there were 4,375,000 shares of the Company's common
stock issued and outstanding of which approximately 1,750,000 shares are "free
trading" and 2,625,000 shares are eligible for sale under Rule 144. The
2,625,000 shares are "restricted securities" that were issued on March 2,
1999. Rule 144 provides, in essence, that so long as there is available
current public information about the Company, a person holding restricted
securities for a period of at least one year may sell in each 90 day period
(provided he is not part of a control group acting in concert), an amount
equal to the greater of the average weekly trading volume of the stock during
the four calendar weeks preceding the sale or 1% of the Company's outstanding
shares of Common Stock. In addition, a person who has not been an affiliate
of the Company at any time during the three months preceding a sale, and who
has owned his or her restricted shares for at least two years within the
meaning of Rule 144, would be entitled to sell his or her shares under Rule
144 without restriction. The possibility of sales under Rule 144 may, in the
future, have a depressive affect on the price of the Company's securities in
any market which may develop.
Item 2. Description of Property.
The Company does not own any property and conducts its limited operations
from the office of its president. (See "Item 1. Description of Business:
Facilities.")
Item 3. Legal Proceedings
The Company is not a party to any pending legal proceedings and, to the
best of its knowledge, no litigation by or against the Company has been
threatened.
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Item 4. Submission of Matters to a Vote of Security Holders.
None.
Part II
Item 5. Market for Common Equity and Related Stockholder Matters
Market Information
The Company's common stock has been included on the OTC Bulletin Board
under the symbol "CTCY" since approximately September, 1998. There was no
trading market for the Company's common stock prior to that date. The
following table sets forth the high and low bid quotations for the Company's
common stock on the OTC Bulletin Board for the portion of 1998 that the stock
was quoted and for all of 1999.
High Bid Low Bid
1998
Third Quarter $0.03125 $0.03125
Fourth Quarter 0.03125 0.03125
High Bid Low Bid
1999
First Quarter $ 0.125 $0.03125
Second Quarter 0.25 0.125
Third Quarter 0.3125 0.25
Fourth Quarter 0.3125 0.3125
The foregoing quotations represent inter-dealer prices without retail mark-up,
mark-down, or commission, and may not represent actual transactions. Despite
the publication of quotations, there is currently no active trading market for
the Company's stock, and there can be no assurance that an active or liquid
trading market for the Company's stock will develop in the future.
No dividends have ever been paid on the Company's securities, and the
Company does not anticipate paying dividends in the foreseeable future.
At March 20, 2000, there were approximately 85 holders of record of
the Company's common stock, including broker-dealers and clearing firms
holding shares on behalf of their clients, as reported by the Company's
transfer agent.
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Transfer Agent
Atlas Stock Transfer Company, 5899 South State Street, Salt Lake City,
Utah 84107, telephone (801) 266-7151, serves as transfer agent and registrar
for the Company's common stock.
Recent Sales of Unregistered Securities
On March 1, 1999, the Company sold an aggregate of 2,625,000 shares of
its restricted common stock to seven sophisticated investors, including three
officers and directors of the Company, for $105,000. No underwriter was
involved in the transactions and the shares were sold by the Company directly
to the investors. The shares were sold without registration under the
Securities Act of 1933, as amended (the "Securities Act"), in reliance on the
exemption from such registration requirements provided by Section 4(2) of the
Securities Act for transactions not involving any public offering. The shares
were sold without general advertising or solicitation. The purchasers
acknowledged that they were purchasing "restricted securities" which had not
been registered under the Securities Act and which were subject to certain
restrictions on resale, and the certificates representing the shares were
imprinted with the usual and customary restricted stock legend. The shares
were sold to the investors pursuant to the terms of a Stock Purchase Agreement
between the Company and T. Kent Rainey dated as of February 10, 1999, which
was approved by the Company's shareholders on February 23, 1999. Of the
2,625,000 shares sold, the Company's officers and directors acquired the
following numbers of shares: T. Kent Rainey, 800,000; William P. Archer,
750,000; and Vicki L. Rainey, 100,000. Mark N. Schneider, legal counsel to
the Company, acquired 125,000 shares.
Item 6. Management's Discussion and Analysis or Plan of Operation
During the next twelve months, and thereafter if required, the officers
and directors of the Company will utilize their contacts in an effort to
locate a business opportunity for acquisition or participation by the Company.
These contacts may include investment bankers and other securities
professionals, lawyers, accountants, industry consultants, members of
management of public and private companies, business brokers, and personal
acquaintances. When and if a potential business opportunity is located, the
Company's officers and directors may incur travel expenses in connection with
their review of the opportunity and, if they determine to proceed further, may
also incur expenses for the engagement of professionals such as lawyers and
accountants to assist in a "due diligence" review of the opportunity and the
negotiation and preparation of the necessary legal documents. While the
precise nature and amount of these expenses cannot be foreseen at this time,
the Company anticipates that its current assets will be adequate to pay these
expenses during the next twelve months. As of December 31, 1999, the Company
had net assets in the form of cash and cash equivalents in the approximate
amount of $255,000. The Company anticipates that the interest income it earns
on that amount will be sufficient to pay the majority of the Company's limited
operating expenses including rent, filing fees, and routine legal and
accounting fees for the next twelve months, leaving the majority of the
Company's assets available for expenses incurred in connection with the
location, evaluation, and acquisition of a business opportunity.
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The Company cannot presently foresee the cash requirements of any
business opportunity which may ultimately be acquired by the Company.
However, since it is likely that any business it acquires will be involved in
active business operations, the Company anticipates that an acquisition will
result in increased cash requirements as well as increases in the number of
employees of the Company.
Item 7. Financial Statements
The following financial statements are being filed with this report and
are located immediately following the signature page.
Financial Statements, December 31, 1999
Independent Auditors' Report
Balance Sheet, December 31, 1999
Statements of Operations, for the years ended December 31, 1999 and
1998 and from inception on May 21, 1985 through December 31, 1999
Statements of Comprehensive Income (Loss), for the years ended
December 31, 1999 and 1988 and from inception on May 21, 1985
through December 31, 1999
Statement of Stockholders' Equity, from inception on May 21, 1985
through December 31, 1999
Statements of Cash Flows, for the years ended December 31, 1999 and
1998 and from inception on May 21, 1985 through December 31, 1999
Notes to Financial Statements
Item 8. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
The change in the Company's principal independent accountants was
reported in the current report on Form 8-K filed with the Securities and
Exchange Commission on March 7, 2000.
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Part III
Item 9. Directors, Executive Officers, Promoters and Control Persons;
Compliance with Section 16(a) of the Exchange Act
Directors and Executive Officers
The following table sets forth the names, ages, and titles of each of the
executive officers and directors of the Company.
Name Age Title*
T. Kent Rainey 51 President and Director
William P. Archer 49 Vice President and Director
Vicki L. Rainey 51 Secretary, Treasurer and Director
*The term of office of each director is one year and until his or her
successor is elected at the Company's annual shareholders' meeting and is
qualified, subject to removal by the shareholders. The term of office
for each officer is for one year and until a successor is elected at the
annual meeting of the board of directors and is qualified, subject to
removal by the board of directors. Each of the Company's officers and
directors has served in the offices indicated above since March 2, 1999.
Certain biographical information of the Company's directors and officers
is set forth below.
T. Kent Rainey, age 51, is a co-owner and operator of Rainey Financial
Group, a small private company owned and operated by T. Kent Rainey and Vicki
L. Rainey which is engaged in the business of factoring accounts receivable
and making short-term loans. Rainey Financial is not a licensed financial
institution and holds no special licenses or permits other than the general
licenses required to operate a business. Mr. Rainey has also been actively
involved in managing his own investments during the past 25 years. He
graduated from Utah State University in 1970 with a degree in accounting. Mr.
Rainey is the husband of Vicki L. Rainey.
William P. Archer, age 49, is and has since 1994 been Vice President of
Archer Supply, Inc., a private company holding and managing investments,
primarily in real estate. From 1968 to 1994, he was an owner and operator of
Auto Parts Unlimited, an automotive warehouse and 9 retail stores, where he
held the title of Vice President and Sales Manager. From 1989 to 1991, he was
a member of the National Advisory Board of TRW, Inc.
Vicki L. Rainey, age 51, is a co-owner and operator of Rainey Financial
Group and manages her own investments. Ms. Rainey graduated cum laude from
the University of Utah in 1989 with a B.A. degree in History. Ms. Rainey is
the wife of T. Kent Rainey.
14
<PAGE>
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the Company's directors and executive officers, and persons who own
more than 10% of a registered class of the Company's equity securities to file
with the Securities and Exchange Commission initial reports of ownership and
reports of changes in ownership of equity securities of the Company. Officers,
directors, and greater than 10% shareholders are required to furnish the
Company with copies of all Section 16(a) forms they file. Based on the copies
of the reports provided to it, the Company believes that all reports required
by Section 16(a) for transactions in 1999 have been timely filed except the
following:
(1) the initial reports of beneficial ownership on Form 3 of T. Kent Rainey,
Vicki L. Rainey and William P. Archer, which were due on July 8, 1999
were not filed until March 27, 2000.
Item 10. Executive Compensation
The Company's officers do not receive any compensation from the Company
for serving as officers. The Company has not paid any compensation to any
officer during the past three years nor has the Company granted any stock
options or restricted stock to its officers during the past three years.
The Company has no retirement, pension, profit sharing, or insurance or
medical reimbursement plans covering its officers or directors, and is not
contemplating implementing any of these plans at this time.
No advances have been made or contemplated by the Company to any of its
officers or directors.
Item 11. Security Ownership of Certain Beneficial Owners and Management
The following table sets forth as of March 20, 2000, the number of shares
of the Company's common stock, par value $0.001, owned of record or
beneficially by each person known to be the beneficial owner of 5% or more of
the issued and outstanding shares of the Company's common
15
<PAGE>
stock, and by each of the Company's officers and directors, and by all
officers and directors as a group. On March 20, 2000, there were outstanding
4,375,000 shares of the Company's common stock.
Number of
Name Shares Owned(1) Percent of Class
Principal Shareholders
Byron B. Barkley(2) 400,000 9.1%
Tyler K. Rainey(3) 410,000 9.4%
Officers and Directors(4)
T. Kent Rainey(5) 800,000 18.3%
William P. Archer 750,000 17.1%
Vicki L. Rainey(5) 100,000 2.3%
All Officers and Directors 1,650,000 37.7%
as a Group (3 persons)(5)
_________________________________
(1) Unless otherwise indicated, all shares are held beneficially and of
record by the person indicated.
(2) Mr. Barkley's address is 39 West Market Street, Salt Lake City, Utah
84101.
(3) Mr. Tyler Rainey's address is 744 E. Rosemore Court, Murray, Utah 84107.
Mr. Tyler Rainey is the adult son of T. Kent and Vicki Rainey.
(4) The address for each of the Company's officers and directors is 175 South
Main Street, Suite 1210, Salt Lake City, Utah 84111.
(5) T. Kent Rainey and Vicki L. Rainey are husband and wife and each
disclaims beneficial ownership of the shares held by the other.
Item 12. Certain Relationships and Related Transactions
On March 2, 1999, the Company sold an aggregate of 2,625,000 shares of
its restricted common stock to seven investors, including the Company's
current officers and directors, for $105,000 pursuant to the terms of a Stock
Purchase Agreement between the Company and T. Kent Rainey dated as of February
10, 1999. The terms of the transaction were negotiated at arm's length by Mr.
Rainey and the former members of management of the Company and the transaction
was approved by the Company's shareholders on February 23, 1999. Of the
2,625,000 shares sold, the Company's officers and directors acquired the
following numbers of shares: T. Kent Rainey, 800,000; William P. Archer,
750,000; and Vicki L. Rainey, 100,000. Mark N. Schneider, legal counsel to
the Company, acquired 125,000 shares.
16
<PAGE>
The Company utilizes office space at the office of T. Kent Rainey, its
president. This space is subleased to the Company on a month-to-month basis
for a monthly rental of $180 plus its portion of office expenses estimated at
an additional $50 to $70 per month.
Item 13. Exhibits and Reports on Form 8-K.
(a) Exhibits. The following documents are included as exhibits to this
report.
Exhibit SEC
No. Reference No. Title of Document Location
3.1 3 Articles of Incorporation Exhibit 3.1 to
and amendments thereto Form 10-SB filed
April 29, 1999*
3.2 3 Bylaws Exhibit 3.2 to
Form 10-SB filed
April 29, 1999*
27 27 Financial Data Schedule This Filing
*Incorporated by reference.
(b) No reports on Form 8-K were filed during the last quarter of the
year ended December 31, 1999.
17
<PAGE>
Signatures
In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
CONCEPT CAPITAL CORPORATION
(Registrant)
Date: March 27, 2000 By /s/ T. Kent Rainey
T. Kent Rainey, President
In accordance with the Exchange Act, this report has been signed below by
the following persons on behalf of the registrant and in the capacities and on
the dates indicated.
Dated: March 27, 2000 By /s/ T. Kent Rainey
T. Kent Rainey
President and Director
(Principal Executive Officer)
Dated: March 27, 2000 By /s/ William P. Archer
William P. Archer
Vice President and Director
Dated: March 27, 2000 By /s/ Vicki L. Rainey
Vicki L. Rainey
Secretary and Director
(Principal Accounting Officer)
18
<PAGE>
INDEPENDENT AUDITORS' REPORT
Board of Directors
CONCEPT CAPITAL CORPORATION
Salt Lake City, Utah
We have audited the accompanying balance sheet of Concept Capital Corporation
[a development stage company] at December 31, 1999, and the related statements
of operations, comprehensive income (loss), stockholders' equity and cash
flows for the year ended December 31, 1999 and from inception on May 21,
1985 through December 31, 1999. These financial statements are the
responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audit. The
financial statements of Concept Capital Corporation as of and for the year
ended December 31, 1998 and for the period from inception on May 21, 1985
through December 31, 1998 were audited by other auditors whose report,
dated January 25, 1999, expressed an unqualified opinion on these
financial statements. The financial statements for the period from
inception on May 21, 1985 through December 31, 1998 reflect a net income
of $6,374 of the total net income from inception. The other auditors' report
has been furnished to us, and our opinion, insofar as it relates to the
amounts included for such prior periods, is based solely on the report of the
other auditors.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, based on our audit and the report of other auditors, the
financial statements audited by us present fairly, in all material respects,
the financial position of Concept Capital Corporation as of December 31, 1999,
and the results of its operations, and cash flows for the year ended
December 31, 1999 and from inception through December 31, 1999, in conformity
with generally accepted accounting principles.
/s/ Pritchett, Siler & Hardy, P.C.
February 29, 2000
Salt Lake City, Utah
19
<PAGE>
CONCEPT CAPITAL CORPORATION
[A Development Stage Company]
BALANCE SHEET
ASSETS
December 31,
1999
__________
CURRENT ASSETS:
Cash in bank $ 254,522
__________
Total Current Assets $ 254,522
___________
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 150
__________
Total Current Liabilities 150
__________
STOCKHOLDERS' EQUITY:
Common stock, $.001 par value,
50,000,000 shares authorized,
4,375,000 shares issued and
outstanding 4,375
Capital in excess of par value 243,380
Earnings accumulated during
the development stage 6,617
__________
Total Stockholders' Equity 254,372
__________
$ 254,522
___________
The accompanying notes are an integral part of this financial statement.
20
<PAGE>
CONCEPT CAPITAL CORPORATION
[A Development Stage Company]
STATEMENTS OF OPERATIONS
For the From Inception
Year Ended on May 21,
December 31, 1985 Through
________________ December 31,
1999 1998 1999
________ ________ _____________
REVENUE:
Interest, dividends, and capital gain
distributions $ 11,777 $ 21,073 $ 132,777
Gain from sale of available-for-sale
securities 10,138 - 19,334
________ ________ _____________
Total Revenues 21,915 21,073 152,111
________ ________ _____________
EXPENSES:
General and administrative 21,622 4,220 76,872
Loss on sale or abandonment of
available-for-sale securities - - 61,763
Amortization - - 500
________ ________ ____________
Total Expenses 21,622 4,220 139,135
________ ________ ____________
INCOME BEFORE INCOME TAXES 293 16,853 12,976
CURRENT TAX EXPENSE 50 1,623 6,359
DEFERRED TAX EXPENSE - - -
________ ________ ____________
NET INCOME $ 243 $ 15,230 $ 6,617
________ ________ ____________
INCOME PER COMMON SHARE $ .00 $ .01 $ .00
________ ________ ____________
The accompanying notes are an integral part of these financial statements.
21
<PAGE>
CONCEPT CAPITAL CORPORATION
[A Development Stage Company]
STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
For the From Inception
Year Ended on May 21,
December 31, 1985 Through
________________ December 31,
1999 1998 1999
________ ________ _____________
NET INCOME $ 243 $ 15,230 $ 6,617
OTHER COMPREHENSIVE INCOME:
Net unrealized gain(loss) on
available-for-sale securities,
net of tax ($2,332 tax during
year ended December 31, 1999) (9,331) 15,078 (33,943)
Reclassification adjustment for
realized gains (losses) on
available-for-sale securities,
net of tax ($2,027 tax during
year ended December 31, 1999) (8,111) - 33,943
________ ________ _____________
COMPREHENSIVE INCOME (LOSS) $(17,199)$ 30,308 $ 6,617
________ ________ _____________
The accompanying notes are an integral part of these financial statements.
22
<PAGE>
CONCEPT CAPITAL CORPORATION
[A Development Stage Company]
STATEMENT OF STOCKHOLDERS' EQUITY
FROM THE DATE OF INCEPTION ON MAY 21, 1985
THROUGH DECEMBER 31, 1999
Earnings
Accumulated
Common Stock Capital in During the
___________________ Excess of Development
Shares Amount Par Value Stage
_________ _________ ___________ ___________
BALANCE, May 21, 1985 - $ - $ - $ -
Issuance of 300,000 shares of
common stock for cash,
May 1985 at $.04
per share 300,000 300 11,700 -
Net income for the period
ended December 31, 1985 - - - 341
_________ _________ ___________ ___________
BALANCE, December 31, 1985 300,000 300 11,700 341
Issuance of 1,450,000 shares of
common stock for cash,
July 1986 at $.10 per share,
net of stock offering costs of
$13,245 1,450,000 1,450 130,305 -
Net income for the year
ended December 31, 1986 - - - 3,243
_________ _________ ___________ ___________
BALANCE, December 31, 1986 1,750,000 1,750 142,005 3,584
Net loss for the year
ended December 31, 1987 - - - (3,555)
_________ _________ ___________ ___________
BALANCE, December 31, 1987 1,750,000 1,750 142,005 29
Net income for the year
ended December 31, 1988 - - - 5,965
_________ _________ ___________ ___________
BALANCE, December 31, 1988 1,750,000 1,750 142,005 5,994
Net income for the year
ended December 31, 1989 - - - 8,787
_________ _________ ___________ ___________
BALANCE, December 31, 1989 1,750,000 1,750 142,005 14,781
[Continued]
23
<PAGE>
CONCEPT CAPITAL CORPORATION
[A Development Stage Company]
STATEMENT OF STOCKHOLDERS' EQUITY
FROM THE DATE OF INCEPTION ON MAY 21, 1985
THROUGH DECEMBER 31, 1999
[Continued]
Earnings
Accumulated
Common Stock Capital in During the
___________________ Excess of Development
Shares Amount Par Value Stage
_________ _________ ___________ ___________
Net loss for the year
ended December 31, 1990 - - - (23,653)
_________ _________ ___________ ___________
BALANCE, December 31, 1990 1,750,000 1,750 142,005 (8,872)
Net income for the year
ended December 31, 1991 - - - 4,298
_________ _________ ___________ ___________
BALANCE, December 31, 1991 1,750,000 1,750 142,005 (4,574)
Net loss for the year
ended December 31, 1992 - - - (11,362)
_________ _________ ___________ ___________
BALANCE, December 31, 1992 1,750,000 1,750 142,005 (15,936)
Net loss for the year
ended December 31, 1993 - - - (1,172)
_________ _________ ___________ ___________
BALANCE, December 31, 1993 1,750,000 1,750 142,005 (17,108)
Net loss for the year
ended December 31, 1994 - - - (13,921)
_________ _________ ___________ ___________
BALANCE, December 31, 1994 1,750,000 1,750 142,005 (31,029)
Net income for the year
ended December 31, 1995 - - - 7,218
_________ _________ ___________ ___________
BALANCE, December 31, 1995 1,750,000 1,750 142,005 (23,811)
Net income for the year
ended December 31, 1996 - - - 7,589
_________ _________ ___________ ___________
BALANCE, December 31, 1996 1,750,000 1,750 142,005 (16,222)
[Continued]
24
<PAGE>
CONCEPT CAPITAL CORPORATION
[A Development Stage Company]
STATEMENT OF STOCKHOLDERS' EQUITY
FROM THE DATE OF INCEPTION ON MAY 21, 1985
THROUGH DECEMBER 31, 1999
[Continued]
Earnings
Accumulated
Common Stock Capital in During the
___________________ Excess of Development
Shares Amount Par Value Stage
_________ _________ ___________ ___________
Net income for the year
ended December 31, 1997 - - - 7,366
_________ _________ ___________ ___________
BALANCE, December 31, 1997 1,750,000 1,750 142,005 (8,856)
Net income for the year
ended December 31, 1998 - - - 15,230
_________ _________ ___________ ___________
BALANCE, December 31, 1998 1,750,000 1,750 142,005 6,374
Issuance of 2,625,000 shares
common stock for cash, March
1999 at $.04 per share, net
of stock offering costs of
$1,000 2,625,000 2,625 101,375 -
Net income for the year ended
December 31, 1999 - - - 243
_________ _________ ___________ ___________
BALANCE, December 31, 1999 4,375,000 $ 4,375 $ 243,380 $ 6,617
_________ _________ ___________ ___________
The accompanying notes are an integral part of these financial statements.
25
<PAGE>
CONCEPT CAPITAL CORPORATION
[A Development Stage Company]
STATEMENTS OF CASH FLOWS
For the From Inception
Year Ended on May 21,
December 31, 1985 Through
________________ December 31,
1999 1998 1999
________ ________ _____________
Cash Flows From Operating Activities:
Net income $ 243 $ 15,230 $ 6,617
Adjustments to reconcile net income
(loss) to net cash used by operating
activities:
Amortization expense - - 500
Net realized (gain) loss on disposition
of securities (10,138) - 42,429
Changes in assets and liabilities:
(Decrease) in accounts payable (500) - 100
Increase (decrease) in income taxes
payable (1,573) 1,523 50
________ ________ _____________
Net Cash Provided (Used) by
Operating Activities (11,968) 16,753 49,696
________ ________ _____________
Cash Flows From Investing Activities:
Payment of organization costs - - (500)
Proceeds from sale of securities 132,637 - 259,032
Purchase of securities - (23,832) (301,461)
________ ________ _____________
Net Cash Provided (Used) by
Investing Activities 132,637 (23,832) (42,929)
________ ________ _____________
Cash Flows From Financing Activities:
Proceeds from common stock issuance 105,000 - 262,000
Payments for stock offering costs (1,000) - (14,245)
________ ________ _____________
Net Cash Provided by Financing
Activities 104,000 - 247,755
________ ________ _____________
Net Increase (Decrease) in Cash 224,669 (7,079) 254,522
Cash at Beginning of Year 29,853 36,932 -
________ ________ _____________
Cash at End of Year $254,522 $ 29,853 $ 254,522
________ ________ _____________
Supplemental Disclosures of Cash Flow Information:
Cash paid during the period for:
Interest $ - $ - $ -
Income taxes $ 1,659 $ 100 $ 6,309
Supplemental Schedule of Noncash Investing and Financing Activities:
For the year ended December 31, 1999:
Unrealized gains on available-for-sale securities in the amount
of $21,801 at 1998 were reversed during 1999 due to the sale of the
underlying securities and resulted in realized gains of $10,138 on
proceeds of $132,637.
For the year ended December 31, 1998:
The Company recorded unrealized losses on available-for-sale securities
of $5,060 for which deferred taxes of $739 were recognized as a reduction
in the unrealized gains.
The accompanying notes are an integral part of these financial statements.
26
<PAGE>
CONCEPT CAPITAL CORPORATION
[A Development Stage Company]
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization - Concept Capital Corporation (the Company) was organized under
the laws of the State of Utah on May 21, 1985. The Company is seeking
potential business opportunities for acquisition or participation. The
Company has not yet generated significant revenues from its planned principal
operations and is considered a development stage company as defined in
Statement of Financial Accounting Standards (SFAS) No. 7. The Company has, at
the present time, not paid any dividends and any dividends that may be paid in
the future will depend upon the financial requirements of the Company and
other relevant factors.
Accounting Estimates - The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities, the disclosures of contingent assets and liabilities at the date
of the financial statements, and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimated
by management.
Cash and Cash Equivalents - For purposes of the financial statements, the
Company considers all highly liquid debt instruments purchased with a maturity
of three months or less to be cash equivalents.
Concentration of Credit Risk - For the year ended December 31, 1999, the
Company had cash balances in excess of federally insured amounts of
approximately $154,500.
Investments - Investments in available-for-sale securities are carried at fair
value. Unrealized gains and losses, net of the deferred tax effects, are
included as a separate element of stockholders' equity. Realized gains and
losses are based on the difference between sales price and actual cost of the
securities and are included in earnings.
Earnings(Loss) Per Share - The computation of income (loss) per share is based
on the weighted average number of shares outstanding during the period
presented in accordance with Statement of Financial Accounting Standards No.
128, "Earnings Per Share" [See Note 7].
Comprehensive Income - The Company adopted the provisions of SFAS No. 130,
"Reporting Comprehensive Income", during 1999.
Recently Enacted Accounting Standards - Statement of Financial Accounting
Standards (SFAS) No. 132, "Employer's Disclosure about Pensions and Other
Postretirement Benefits", SFAS No. 133, "Accounting for Derivative Instruments
and Hedging Activities", SFAS No. 134, "Accounting for Mortgage-Backed
Securities." and SFAS No. 135, "Rescission of FASB Statement No. 75 and
Technical Corrections" were recently issued. SFAS No. 132, 133, 134 and 135
have no current applicability to the Company or their effect on the financial
statements would not have been significant.
27
<PAGE>
CONCEPT CAPITAL CORPORATION
[A Development Stage Company]
NOTES TO FINANCIAL STATEMENTS
NOTE 2 - AVAILABLE-FOR-SALE SECURITIES
The Company had previously invested in mutual fund shares which were accounted
for as investments available-for-sale. At December 31, 1998, these shares had
unrealized gains of $21,801 (with an estimated tax effect of $4,359). During
the year ended December 31, 1999 the Company sold all of its holdings and
realized a gain of $10,138 from the proceeds of $132,637.
NOTE 3 - COMMON STOCK
During March 1999, the Company issued 2,625,000 shares of common stock for
cash proceeds of $105,000 ($.04 per share) to an individual and six other
investors. Stock offering costs of $1,000 were netted against additional paid
in capital. The issuance of common stock resulted in a change of control of
the Company [See Note 5].
During July 1986, the Company completed a public offering of 1,450,000 shares
of common stock for gross proceeds of $145,000, or $.10 per share. Offering
costs of $13,245 were offset against the proceeds of the offering.
During May 1985, in connection with its organization, the Company issued
300,000 shares of common stock to its original officers and directors and
their associates for total proceeds of $12,000, or $.04 per share.
NOTE 4 - INCOME TAXES
The Company accounts for income taxes in accordance with Statement of
Financial Accounting Standards No. 109 "Accounting for Income Taxes". SFAS
No. 109 requires the Company to provide a net deferred tax asset/liability
equal to the expected future tax benefit/expense of temporary reporting
differences between book and tax accounting methods and any available
operating loss or tax credit carryforwards. At December 31, 1999 the Company
did not have a net operating loss carryforward. There were no significant
deferred tax assets or liabilities as of December 31, 1999.
NOTE 5 - CHANGE IN CONTROL
During March 1999, an individual and six other investors purchased 2,625,000
shares of common stock of the Company [See Note 3] giving them a 60%
controlling interest in the Company. The former officers and directors
resigned and the individual was elected as the new president and a member of
the board of directors.
NOTE 6 - RELATED PARTY TRANSACTIONS
Management Compensation - The Company did not pay compensation to its officers
and directors during the year ended December 31, 1999.
Rent - The Company shares office space with entities related to an
officer/shareholder of the Company. Beginning in April 1999, the Company has
agreed to pay $180 rent per month for its share of the office space. The
Company paid approximately $1,600 for the year ended December 31, 1999 for its
share of the office space.
28
<PAGE>
CONCEPT CAPITAL CORPORATION
[A Development Stage Company]
NOTES TO FINANCIAL STATEMENTS
NOTE 7 - EARNINGS PER SHARE
The following data show the amounts used in computing income per share and the
effect on income and the weighted average number of shares of dilutive
potential common stock for the periods presented:
For the From Inception
Year Ended on May 21,
December 31, 1985 Through
___________________ December 31,
1999 1998 1999
_________ _________ _____________
Income from continuing
operations applicable to common
stockholders (numerator) $ 243 $ 15,230 $ 6,617
_________ _________ _____________
Weighted average number of
common shares outstanding
used in earnings per share
during the period (denominator) 3,936,301 1,750,000 1,738,511
_________ _________ _____________
Dilutive earnings per share was not presented, as the Company had no common
equivalent shares for all periods presented that would affect the computation
of diluted earnings per share.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from
financial statements for the year ended December 31, 1999 and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> DEC-31-1999
<CASH> 254,522
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 254,522
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 254,522
<CURRENT-LIABILITIES> 150
<BONDS> 0
0
0
<COMMON> 4,375
<OTHER-SE> 249,997
<TOTAL-LIABILITY-AND-EQUITY> 254,522
<SALES> 0
<TOTAL-REVENUES> 21,915
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 21,622
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 293
<INCOME-TAX> 50
<INCOME-CONTINUING> 243
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 243
<EPS-BASIC> .00
<EPS-DILUTED> .00
</TABLE>
